On 26 February 2024, ESBG provided the EBA with its comments on its consultation on Guidelines on preventing the abuse of funds and certain crypto-assets transfers for ML/TF.

The guidelines on the “travel rule” delineate the actions that Payment Service Providers (PSPs), Intermediary PSPs (IPSPs), crypto-asset service providers (CASPs), and Intermediary CASPs (ICASPs) must follow to identify any absence or insufficient information accompanying the transfer of funds or crypto-assets. Additionally, they outline the protocols that these providers should establish to handle transfers of funds or crypto-assets that do not contain the necessary information.

ESBG suggested supplementing the “transfer chain” definition to cover only service providers within the scope of “Regulation (EU) 2023/1113.”

It emphasized aligning “persons linked/connected” terms with planned EU AML Regulation requirements.

In addition, ESBG recommended aligning para 23 with the envisaged AML Regulation to ensure that the addresses that are included with the transfer of funds are the verified addresses. For legal entities, the principal place of business should be preferable.

According to ESBG, the draft Guidelines appropriately categorize the previously ambiguous term “equivalent Identifier” within the domain of official commercial registers and comparable registries for legal entities.

Yet, to prevent legal uncertainty, it is essential to adhere strictly to the anticipated AML regulation’s requirements and definitions. ESBG proposed that EBA cross-check with the European Commission to ensure consistency.

Next to provisions on how to proceed in the case of missing information, several articles of regulation (EU) 2023/1113 explicitly refer to incomplete information on the payer or the payee. The draft Guidelines, as of now, only ascertain cases of incomplete or meaningless/inconsistent information. ESBG called for clarification on incomplete information handling and PSP courses of action.

Also, ESBG justified a 5-day deadline for requests outside the Union in paragraph 43. However, the Guidelines need to recognize that even more complex chains of communication may necessitate extra working days to ensure thorough assessments and response cycles effectively.

Articles 8(2) and 12(2) of Regulation (EU) 2023/1113 stipulate the possible courses of action for the payee’s PSP and the ISPSP, respectively, when a PSP has repeatedly failed to provide requested information on the payee or payer. The rejection of payments is just one possible course of action. It follows that the related provision on reminders according to paragraph 45 of the Guidelines may not imply any stricter restriction of this range of options.

The language in paragraph 75 is unclear, displaying ambiguity. Specifically, there seems to be an inaccurate time reference point concerning the utilization of the payer’s information. Moreover, it is crucial to consider not only the payee’s details but also those of the payer. The recommended amendment from ESBG addresses these concerns